Post on 16-Jan-2023
www.j-l.com | Oceans of know-how
J. Lauritzen A/S
Investor Update – Annual Report 2012
February 2013
Disclaimer
• This presentation contains forward-looking statements concerning J. Lauritzen A/S (“J. Lauritzen”, “JL” or the “Group”) and its financial condition, results of
operations and business. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking
statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown
risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements.
• Forward-looking statements include, among other things, statements concerning J. Lauritzen’s potential exposure to market risks and statements expressing
management’s expectations, beliefs, estimates, forecasts, projections and assumptions. There are numerous factors that could affect J. Lauritzen A/S’ future
operations and could cause J. Lauritzen A/S’ results to differ materially from those expressed in the forward-looking statements included in this presentation.
• All forward-looking statements contained in this presentation are expressly qualified by the cautionary statements contained or referenced to in this statement.
Undue reliance should not be placed on forward-looking statements.
• Each forward-looking statement speaks only as of the date of this presentation. J. Lauritzen does not undertake any obligation to publicly update or revise
any forward-looking statement as a result of new information or future events other than required by applicable law. In light of these risks, results could differ
materially from those stated, implied or inferred from the forward-looking statements contained in this presentation.
• Some of the statistical and graphical information contained in the presentation is supplied from the Clarkson Research Services Limited (“CRSL”) database
and other sources. CRSL has advised that (i) some information in CRSL’s database is derived from estimates or subjective judgments, (ii) the information in
the databases of other maritime data collection agencies may differ from the information in CRSL’s database, (iii) whilst CRSL has taken reasonable care in
the compilation of the statistical and graphical information and believes it to be accurate and correct, data compilation is subject to limited audit and validation
procedures and may accordingly contain errors, (iv) CRSL, its agents, officers and employees cannot accept liability for any loss suffered in consequence of
reliance on such information or in any other manner, and (v) the provision of such information does not obviate any need to make appropriate further
enquiries. Any use of such data and graphical information appear with reference to Clarkson Research Services Limited
• While the information in the presentation is believed to be accurate, no representation or warranty, express or implied, is or will be made in relation to the
accuracy or completeness of this presentation or any other written or oral information transmitted or made available to any person or its advisors in connection
with any investigation of the Group and no responsibility or liability is or will be accepted by the Group or any of their respective affiliates and representatives.
In particular, no representation or warranty, express or implied, is or will be given as to the achievement or reasonableness of any statements, estimates and
projections with respect to the anticipated future performance of the Group and the market for the Group’s products and services.
February 2013 2
2012 was challenging for the shipping industry
• Formation of the AXIS Offshore J/V
• Issuance of JL’s 2nd corporate bond • NOK 500m maturing in October 2017
• Financing secured for 3 MR product tankers • Vessels to be delivered in 2013
• Lauritzen Bulkers • Depressed dry bulk markets (a 25 year low)
• LB hit by counterparty defaults on two capes • Vessels subsequently sold
• Lauritzen Kosan • Tightening of sanctions against Iran
• No renewal of ETH time charters
• Lack of Euro-zone growth • Declining markets for S/R
• Stable/improving markets for ETH and F/P
• Lauritzen Tankers • Disappointing spot markets for product tankers
• Lauritzen Offshore (shuttle tankers) • LO shuttle tankers are long-term employed
February 2013 3
Significant events in JL in 2012 JL markets and business
- JL was influenced by the circumstances and recorded a USD (350)m loss in 2012 - Write-downs and other one-offs accounted for USD (254)m - JL continued to develop its business and succeeded in strengthening its finances
• Agreement with owner to convert subordinated loans (DKK 850m plus accrued interest) into equity • Will increase YE 2012 solvency from 37% to 44%
• Agreement regarding facility with 2014-maturity
• Prolonged into 2015
• “Change of guards”: New JL President & CEO
• Torben Janholt retired • Jan Kastrup-Nielsen appointed
Significant events in JL in 2013, so far
2012 net result of USD (349.7)m - In line with December 2012 announcement
- But considerably below expectations at beginning of 2012
Key figures
February 2013 4
Note: “Revenue” includes other operating income
Comments
USDm 2011 2012
Revenue 621,1 709,4
EBITDA 146,0 88,7
Depreciation (91,2) (250,0)
Profit on sale of vessels (36,2) (102,4)
Operating result 18,5 (263,6)
Income from joint ventures 4,7 (26,2)
Finance net (69,2) (59,5)
Tax and minorities (0,3) (0,5)
JL's share of the result (46,2) (349,7)
Fixed assets 2.361 1.931 Hereof vessels under construction 232 39
Net investments (vessels only) 402 110
Profit margin 3,1% (37,9%)
ROIC 1,1% (13,5%)
Solvency ratio 44,7% 36,8%
ROE (3,8%) (34,1%)
Fleet (full year average) 151 178
Average no. employees 1.300 1.379
Full Year • Unsatisfactory result for 2012
• Result for 2012 was significantly impacted by one-offs (i.e.,
settlements, write-downs, reversals and sale of vessels) – as seen
also in 2010 and 2011
• Normalised EBITDA (i.e. EBITDA before one-offs) decreased
from 2011 to 2012 mainly due to income lost caused by
counterparty defaults and weak dry bulk markets – despite revenue
increase from 2011 to 2012
• Depreciation and write-offs increased from USD 91m in 2011 to
USD 250m in 2012 mainly due to impairments on vessels and
vessels under construction (handysize/handymax dry bulk and
product tankers)
• Decreasing net financial costs reflecting increasing margins on
financing which were off-set by exchange rate gains and absence
of refinancing costs seen in 2011 not repeated in 2012
2012 normalized result of USD (95.4m) – down from USD (21.0m) in 2011 - Result for 2012 was significantly impacted by one-off items with a net effect of USD (254.4)m
February 2013 5
Income statement - condensed Key messages
• One-offs relates mainly to: • Impairments due to lower
expected earnings
• Dry bulk
• Product tankers
• Counterparty defaults
• Sale of vessels
• Sale of claims
• Strategic initiatives
• Sale of vessel to form J/V
• Decrease in normalized EBITDA: • Income lost caused by
counterparty defaults
• Weaker dry bulk markets
Note 2011 2012 2011 2012 2011 2012
Revenue 1) 604.3 695.6 17.0 16.6 587.3 679.0
Other operating income 16.8 13.8 - - 16.8 13.8
Costs 2) (475.1) (620.6) 2.5 0.1 (477.6) (620.7)
Profit before depreciation (EBITDA) 146.0 88.7 19.5 16.7 126.5 72.0
Profit/(loss) on sale of assets 3) (36.2) (102.4) (44.7) (104.1) 8.5 1.8
Depreciations and w rite-dow ns 4) (91.2) (250.0) - (148.7) (91.2) (101.2)
Operating income 18.5 (263.6) (25.2) (236.1) 43.7 (27.5)
Share of profit in joint ventures 5) 4.7 (26.2) - (18.2) 4.7 (8.0)
Net f inancial items (69.2) (59.5) - - (69.2) (59.5)
Profit/(loss) before tax (45.9) (349.2) (25.2) (254.4) (20.8) (94.9)
Income tax 1.9 0.8 - - 1.9 0.8
Profit/(loss) for the year (44.0) (348.4) (25.2) (254.4) (18.8) (94.1)
Non-controlling interest's share of profit/(loss) (2.2) (1.3) - - (2.2) (1.3)
The J. Lauritzen Group's share of profit/(loss) (46.2) (349.7) (25.2) (254.4) (21.0) (95.4)
One-off items include:
1) Proceeds from sale of claims and settlements received
2) Use of provisions for onerous charter contracts
3) Sale of vessels as a consequence of counterparty defaults or strategic initiatives
4) Write-downs on vessels and vessels under construction due to impairment
5) Write-downs on vessels owned by jo int ventures due to impairment
Actual One-off items Normalised
(46,2)
(349,7)
0,3 4,814,7
9,7 3,9
(71,2)(7,8) (0,4) (3,2)
(58,5)
(148,7)(18,2)
(13,4)(15,4)
-400
-350
-300
-250
-200
-150
-100
-50
0
USD
m
2012 versus 2011 - 2012 result down from 2011 due to one-offs, weaker bulk markets and counterparty defaults - 2012 result lower than estimated due to write-downs
6
Result 2012 compared to 2011
February 2013
Total assets amount to USD 2.3b, down USD 366m (14%) from YE 2011
Balance sheet
February 2013 7
Key messages
• Fixed assets down by USD 430m:
• Write-downs and depreciations
• Sale of two Capesize vessels and one gas carrier
• Transfer of ASV to Axis Offshore
• Partly off-set by investments in newbuildings
• Solvency at 36.8% • Will increase to 44% upon conversion of subordinated loans to
equity
• ROIC unsatisfactory at (13.5)%.
• Investments, mainly related to seven deliveries
• three handysize bulk carriers,
• two product tankers,
• one gas carrier and
• one shuttle tanker
• Divestments: Sale of Christina Bulker, Gry Bulker and
Karin Kosan
• At end-2012 outstanding contractual commitments
amounted to USD 104m (four vessels)
- The decrease mainly relates to sale of vessels, depreciation, write-downs and the Axis Offshore J/V
2011 2012 2012E
USDm Act Act Nex Oct
Fixed assets 2.361 1.931 2.129
Assets in operation 2.031 1.762 1.895
Prepayments 232 39 70
Invested in Joint Ventures 98 130 165
Current assets 321 384 336
- Cash 234 267 224
Total assets 2.682 2.315 2.465
JL share on equity 1.199 852 1.015
Minority share 2 0 1
Non current liabilities 1.311 1.285 1.267
Current liabilities 170 178 182
Solvency 44,7% 36,8% 41,2%
ROE (3,8%) (34,1%) (16,0%)
NIBD/EBITDA 6,8 10,7 10,6
Investments (vessels only) 435 190 195
Divestments (vessels only) 33 79 79
ROIC 1,1% (13,5%) (4,8%)
Full Year
Broker valuation declined by 16% (on average) on current fleet during 2012
February 2013 8
- Average Loan to Value on fully owned fleet of 76% (net of USD 33m in pledged cash provided as additional security)
Vessel values end 2012 in USDm – book values, broker values and mortgaged debt on fully owned fleet
563
325
167 188
219 217
316
127 125
153 145 138
406
147
200
175 188
197
2.5
1.5
10.3
4.0
2.0
4.7
0
2
4
6
8
10
12
0
100
200
300
400
500
600
HS/HM CZ SR/FP ETH MR ST
BULK GAS TANK OFFSHORE
Book Value Debt (net of pledged cash) Market Value Vessel average age (RHS)
Book and market values as per end-Dec 2012. Debt as per end-Dec 2012. Fleet count as per end-Dec 2012
Note: Book value in Annual Report note 9 also include USD 23m relating to e.g. dockings etc. Totals may differ due to rounding
HS = Handysize
HM = Handymax
CZ = Capesize
SR= Semi-refrigerated
FP = Fully-pressurized
ETH = Ethylene
MR = Medium range
ST = Shuttletankers
2011 2012 2012
USDm Actual Actual Nex Oct
Cash flow from operations 86 34 24
Cash flow from investments (329) (108) (129)
Financial cash flow 323 107 95
Change in cash position 80 33 (10)
Cash position 234 267 224
Total credit facilities 1.493 1.407 1.399
Hereof used for:
Mortgage debt *) (1.149) (1.029) (1.043)
Corporate bonds *) (116) (216) (200)
Subord. Loans and other debt (169) (161) (156)
Unused credit facilities 58 1 1
Funds available incl. unused facilities 292 268 224
Minimum liquidity 50 50 50
RCD/NIBD 8,0% 3,5% (1,0%)
NIBD/EBITDA 6,8 10,7 10,6
EBIT/Interest expenses 0,3 (4,2) (1,6)
FCF/Debt (23%) (7%) (10%)
Liquidity Ratio 188,9 215,5 184,6
*) Formation costs not included
Full year
Cash flow from operations of USD 34m - Significantly down from USD 85.8 in 2011
Cash flow
February 2013 9
Key messages
• Cash flow from operations down by USD 52m: • Lower EBITDA in 2012 compared to 2011
• Increase in working capital caused by increased fleet
and changed employment patterns
• Cash flow investments down by USD 221m: • Final installments on seven deliveries in 2012 (down
from 18 in 2011)
• Cash flow from financing down by USD 216m: • Draw down at-delivery of facilities down in 2012 from
2011 (fewer vessels delivered)
• Proceeds from bond issue in October 2012
• Cash and unused credit facilities amounts to USD
268m, down USD (24)m from USD 292m at YE 2011 • Does not include USD 33m cash pledged as additional
security in loan facilities
JL in a five year perspective - EBITDA for 2012 impacted by counterparty defaults and challenging bulk markets like in 2011
- Operational cash flow slightly positive, and significantly lower than in 2011
10
Revenues USDm Selected key figures USDm
Cash and Cash flow from operations USDm
Capital structure USDm
February 2013
0
500
1,000
1,500
2,000
2,500
3,000
2008 2009 2010 2011 2012
Total equity Non-current liab. Current liab.
-100
0
100
200
300
400
2008 2009 2010 2011 2012
Cash flow from operating activities
Cash and cash equivalents
0
200
400
600
800
2008 2009 2010 2011 2012
Lauritzen Bulkers Lauritzen Kosan Lauritzen Offshore
Lauritzen Tankers Reefer a.o.
-450
-350
-250
-150
-50
50
150
250
350
2008 2009 2010 2011 2012
EBITDA EBIT
Result for the year One-off items
Strategic position and strongholds of JL’s business units - A diversified and well-positioned business
February 2013 11
Lauritzen Bulkers Lauritzen Kosan Lauritzen Tankers Lauritzen Offshore
ActivityCarriage of dry bulk products Carriage of LPG and
petrochemicals
Carriage of clean petroleum
products
Service to the offshore oil and
gas E&P industry
Fleet Average 119 vessels in 2012 Average 43 vessels in 2012 Average 18 vessels in 2012 Average 4 vessels in 2012
PositionTop-5 pool-operator of
handysize vessels
World leading operator of gas
carriers of 3-10,000 m3
Co-founder and member of
Hafnia MR pool
Long term contracts secured
with major energy companies
StrongholdsStrategic advantageous
position from pool scale and
modern fleet
Strategic advantageous
position from modern fleet
and leading pool
Scale obtained via Hafnia MR
pool
Unique knowledge on
dynamic positioning
D/S Norden, Pacific Basin,
Clipper
Evergas, Unigas, Gaschem
Anthony Veder, Unigas,
IM Skaugen
D/S Torm, A.P. Møller-
Mærsk, Norient, Navig8
Teekay, Knutzen NYK,
American Eagle Tankers
Fragmented. Volatile
Scale, quality, reliability
Few operators. Low volatility.
High entry barriers, know-
how, scale, quality
Industry
characteristic
Key
Competitors
Business Unit
Very fragmented. Volatile.
Scale advantage, reputation,
service
Low/medium volatility.
High entry barrier, know-how,
scale, quality
Result 2012 distributed on business areas
February 2013 12
- EBITDA for 2012 up on 2011 in all business units except Lauritzen Bulkers
Business units
USDm 2011 2012 2011 2012 2011 2012 2011 2012
Revenue 330.9 361.1 143.2 210.3 62.0 61.0 66.2 60.1
EBITDA 75.8 4.0 33.2 35.7 12.2 14.3 37.6 40.4
Depreciations * (37.9) (150.7) (26.4) (27.2) (6.3) (55.3) (20.7) (16.8)
Sale of assets (38.6) (96.6) 2.3 1.8 0.0 0.0 0.0 (7.5)
Operationg income (EBIT) (0.7) (243.2) 9.1 10.3 5.9 (40.9) 16.9 16.1
Joint ventures 2.3 (28.6) 2.2 0.7 0.2 (1.1) 0.0 2.7
Finance net (18.4) (25.0) (3.7) (1.9) (5.8) (7.6) (11.6) (10.8)
Result before tax (16.8) (296.8) 7.7 9.1 0.4 (49.5) 5.3 7.9
JL's share of the result (24.7) (294.5) 6.5 8.9 (4.0) (50.6) 3.7 8.8
Invested capital (average) 1121.5 1108.3 423.4 408.3 222.7 274.8 464.0 364.6
ROIC 0.1 % (24.5)% 2.7 % 2.7% 2.7 % (15.3)% 3.6 % 5.1%
Average no of employees 493 590 403 505 121 154 126 58
* Incl. write-downs
Invested capital EBITDAInvested capital EBITDA Invested capital EBITDA Invested capital EBITDA
Lauritzen Bulkers Lauritzen Kosan Lauritzen Tankers Lauritzen Offshore
1108408 275
3654
36
14 40
Total fleet of 175 vessels controlled by JL at year end 2012
13
Lauritzen Bulkers Lauritzen Kosan Lauritzen Tankers Lauritzen Offshore
* Not including time-charters with a duration of less than six months
- 12 newbuildings, hereof 4 fully-owned to be delivered
- Operational fleet expected to grow 5% in 2013 (18% in 2012), mainly in handysize dry bulk and MR product tankers
Bulk fleet
Han
dysize
Han
dym
ax
Pan
amax
Cap
esize
Total
New
bu
ildin
gs
Total 78 21 3 7 109 5
Owned 17 4 0 4 25 1
Part-owned 17 2 1 0 20 1
B/B in 0 0 0 0 0 0
T/C in *) 16 15 2 3 36 2
Joint charters 3 0 0 0 3 0
Pool, etc. 25 0 0 0 25 1
Kosan fleet
Semi-refrigerated
Ethylen
e
Fully-p
ressurized
Total
New
bu
ildin
gs Total 18 12 14 44 0
Owned 7 6 11 24 0
Part-owned 0 3 0 3 0
B/B in 5 0 0 5 0
T/C in *) 0 0 3 3 0
Joint charters 0 0 0 0 0
Pool, etc. 6 3 0 9 0
Offshore fleet
Shu
ttletankers
ASV
Total
New
bu
ildin
gs
Total 3 1 4 1
Owned 3 0 3 0
Part-owned 0 1 1 1
B/B in 0 0 0 0
T/C in *) 0 0 0 0
Joint charters 0 0 0 0
Pool, etc. 0 0 0 0
Tanker fleet
MR
pro
du
ct tankers
Total
New
bu
ildin
gs
Total 18 18 6
Owned 7 7 3
Part-owned 1 1 0
B/B in 0 0 0
T/C in *) 4 4 3
Joint charters 1 1 0
Pool, etc. 5 5 0
78
21 3 7 Capesize
Panamax
Handymax
Handysize 18
12
14 Fully-pressurized
Ethylene
Semi-refrigerated
18 MR product tankers 3
1 ASV
Shuttletankers
February 2013
Coverage strategy vary from segment to segment to reflect business model
February 2013 14
- Increased coverage in handysize/handymax beginning of 2013 reflecting increased focus on CoAs
- Reduced coverage for product tankers pending delivery of new buildings. Coverage in Ethylene hit by Iran sanctions
Lauritzen Bulkers Lauritzen Kosan Lauritzen Tankers Lauritzen Offshore
Small bulk, gas and product tankers: In segments where JL has scale, carries a high customer retention rate and, in
general, segments recognised as highly liquid, coverage is decided on the basis of market outlook and market conditions.
Larger dry bulk and in Offshore: High coverage preferred in segments with larger vessels, where JL has less scale and/or
less liquid assets (larger vessels, larger cover)
Handy (small bulk): Top-5
pool-operator in handysize dry
bulk. “Play the market”. Huge
customer base
Cape/panamax (larger
bulk): Basically vessels built
against long term contracts (4
owned vessels on 7-13y t/c)
Repeating customers
Contracts are renewed
(renegotiated annually)
Long term employment mixed
with spot employment.
Spot employment via Hafnia
MR Pool
2 shuttletankers on 11y
bareboats. 1 shuttletanker on
t/c until Aug 2014.
Long term contracts with oil
majors
Coverage
strategy
Coverage
rationale
Business Unit
Cover at the
beginning of
the yearCape size
Pana-max
Handy-max
Handy-size
2012 85% 57% 14% 13%
2013 83% 50% 24% 24%
0%
25%
50%
75%
100%
2012
2013
F/P S/REthy-lene
2012 64% 52% 52%
2013 79% 58% 25%
0%
25%
50%
75%
100%
Medium Range
2012 43%
2013 29%
0%
25%
50%
75%
100%
Shuttle Tankers
2012 100%
2013 100%
0%
25%
50%
75%
100%
Dry Bulk: smaller segments has better balance Gas Carriers: 2013 below 2012
- But improving during the year
Industrialization and urbanization in Asia continue to be key drivers
supporting the dry bulk trade.
2013 expected to see continuously low spot rates due to weak
global economy and high delivery schedules
However expectation of decelerating supply growth during the year
and improved global economy will support dry bulk market in H2
Total net fleet growth expected to fall from 10.5% in 2012 to 6% in
2013.
Market balance for handysize segment relatively well balanced
Large surplus shipbuilding capacity will put pressure on tonnage
prices in 2013
Demand for smaller gas carriers almost stagnated 2012 after
having posted strong growth during 2010 and 2011
The fleet of smaller gas carriers increase by an estimated 4%
during 2012
Demand and supply expected to grow by approx. 3% in 2013,
however with demand lagging behind in 2013-H1
Source: J. Lauritzen A/S based on data from Clarkson Research Services Source: J. Lauritzen A/S based on data from Fearnley’s
15
Outlook in 2013 in Dry Bulk and Gas – on average below 2012
February 2013
0
1000
2000
3000
4000
5000
0
6000
12000
18000
24000
30000
36000
2010-01 2010-07 2011-01 2011-07 2012-01 2012-07
Average of the 6 T/C Routes for the Baltic Handysize Index
Average of the 6 T/C Routes for Baltic Supramax Index
Baltic Exchange Dry Index (1st November = 1334) - RHS
Spot Market Rates 2010-2012 USD/Day
0
100
200
300
400
500
600
700
2010-01 2010-07 2011-01 2011-07 2012-01 2012-07
East (F/P) coaster West (S/R) coaster
6500 S/R 10000 ETH
Spot Market Rates 2010-2012 USD'000/Month
Product Tankers: Modest improvement with possible upside
16
Product Tankers -Modest improvement during 2013 Shuttletankers
2013 expected to be another year of low growth in global oil
demand, due to weak economic activity and high oil prices. This
implies low growth for product tankers demand as well.
Refinery re-locations and refinery closures will support longer
voyages could lift ton-miles demand and cause the market to
improve more than expected
The total product tanker fleet will grow by a couple of percent with
the MR fleet expected to grow somewhat higher
Overall the product tanker market is expected to see only modest
improvement in 2013
Highly specialized tankers vessels, mainly employed in the North
Sea and Brazil
Medium entry barriers
Rates expected to be negatively affected by new entrants in
2013
Source: J. Lauritzen A/S based on data from Clarkson Research Services
Market Outlook in 2013 (cont.) – shipping is a cyclical business
February 2013
-5,000
0
5,000
10,000
15,000
20,000
2010-01 2010-07 2011-01 2011-07 2012-01 2012-07 BCTI TC2_37 TCE: 37,000mt CPP Rotterdam- New York
BCTI TC3_38 TCE: 38,000mt CPP Aruba (Caribs) - New York
BCTI TC4-TCE: 30,000mt, CPP/UNL Singapore- Chiba (Japan)
Spot Market Rates Key Product Tanker Routes 2010-2012
Debt overview - No refinancing until 2015 (Agreement regarding facility with 2014-maturity: Prolonged into 2015)
- Subordinated loans to be converted to equity
February 2013 17
Outstanding Debt (forecast) - Existing Facilities – USDm Repayment profile (forecast) - Existing Facilities – USDm
Expiring bank loans expected to be refinanced at
maturity
Bond strategy involves total of USD 300mm on a
rolling basis
Term loans: Maturity 2016–2017 (balloon at maturity)
ECA backed term loans: with maturity in 2021-2022 (fully
amortized)
Revolving facilities: Maturity 2015-2017 (balloon at maturity)
Unsecured bond: Maturity May 2015 and October 2017
Subordinated loans from owner: Maturity 2015/2022
Will be converted to equity
492 503 446 372
126 107
296 271 240
209
178 147
245 232
184
78
66
206 206
206
87
87
0
250
500
750
1000
1250
1500
2012 2013 2014 2015 2016 2017
Term loans Term loans ECA backed Revolving
Bonds unsecured Subordinated loans
96 111
89 71
48
29
118
213
66
119
87
0
50
100
150
200
250
300
350
400
2013 2014 2015 2016 2017
Bullit subordinated loans Bullit bonds Bullit bank loans Repayment
Note: Bullet payments on existing bank facilities are normally refinanced on or
before maturity by way of pledging the financed vessels in a new facility and
using the proceeds to redeem the existing facility
Note: “Forecast”. Actual data shown as per end-2012. Numbers may change subsequently, e.g. in case of sale of a vessel, prepayment, reduction in use of revolving facilities, etc.
Totals may differ due to rounding. Gross debt. Bond debt at hedged value.
Moved to
2015
Accomplishments in 2012 and further initiatives will support and develop
JL throughout 2013
Markets in 2013 on average in line with 2012
However, several JL accomplishments in 2012 and
further initiatives will help improve JL’s result for 2013
• Expensive dry bulk time-charters will be redelivered
during 2013
• Coverage in the handysize and handymax (dry bulk)
segment has been increased compared to last year
• Intensive work to reduce OPEX e.g. in the shuttle
tanker segment, improve profitability
• Increased focus on working capital
Increased competitiveness through:
• Project Rejuice – will increase fuel efficiency
• Corporate Responsibility efforts: • Responsible procurement
• Anti-corruption compliance program
• Greenhouse Gas Protocol (GHGP)
• And more initiatives are scheduled for 2013-2015
EBITDA (excl. one-offs and deconsolidated activities)
is expected to come in higher in 2013 than in 2012
February 2013 18
• Competence
• Respect
• Entrepreneurship
• Accountability
• Team spirit
• Enthusiasm
IT ALL COMES DOWN TO PEOPLE
Recovery, however slow, expected from mid-2013 - Result for 2013 expected to be negative but better than 2012
- EBITDA (comparable*) up on 2012 due to redelivery of expensive T/C-vessels and increase of operated product tanker fleet
• EBITDA (comparable*) expected to be slightly higher in 2013 than in 2012; in the range of USD 60m-80m (In 2012:
USD 88.7 of which one-offs and EBITDA from ASV amounted to USD 33.7m)
• Depreciations will decrease by about 10% compared to 2012 mainly due to write-downs and sale of assets in 2012
• Joint ventures expected to be unsatisfactory in 2013 but up on 2012
• Net financials expected to be in line with 2012; Currency and interest rate fluctuations may affect results
• Tax is expected to be limited and minorities’ share of result to decrease
• Net result in 2013 thus expected to be an unsatisfactory USD (75-100)m but up from USD (350)m in 2012
The first quarter of 2013 is expected to be the most challenging one
February 2013 19
JL group level
Business units
Lauritzen Bulkers: EBITDA excl one-offs expected to to be somewhat better than 2012 but slightly negative
Lauritzen Kosan: EBITDA expected to be in line with 2012
Lauritzen Offshore: EBITDA* (shuttletankers only) expected slightly up on 2012
Lauritzen Tankers: EBITDA expected to be positive and better than 2012
*) “Comparable“ EBITDA excluding 2012 one-offs and EBITDA related to Dan Swift, the accommodation and support
vessel sold into J/V Axis Offshore as per July 1, 2012
Sensitivity guidance - 2013
Business Unit Change +/- Change in result +/-
Bulk (small) 1,000 USD/day USD 13.4m
Bulk (large) 1,000 USD/day USD 0.4m
Gas 500 USD/day USD 1.7m
Tank 1,000 USD/day USD 4.1m
Summary of messages
February 2013 20
Financials
Solvency will be strengthened by conversion of subordinated loans to equity
Liquidity continues to be satisfactory
No refinancing exposure until 2015
2013 will be difficult: A gradual and slow recovery not likely before mid-2013
Decreasing vessel values and continued low earnings will be challenging
Strategy is to be prudent, to consolidate but also prepare to grow its business further
Dry bulk and product tankers: Current markets represent windows of opportunity for chartering of tonnage
Gas: Grow Far Eastern fully-pressurized business and expand in larger size Ethylene vessels
Offshore: Continue focus on ASV via the AXIS Offshore joint venture
Keeping solid liquidity and controlling the leverage remains key
Bond strategy unchanged
Sale of selected assets are also considered as part of strategy implementation
Business
JL has been hit by counterparty defaults in dry bulk (market hit a 25 year low point in 2012):
Defaults have since 2010 affected JL’s results negatively and have reduced JL’s long term contract cover, however
In an expected weak market for 2013, JL expects to deliver improved EBITDA (comparable) and improved net result
Increased coverage in small bulk, redelivery of expensive T/Cs and continued focus on operation (OPEX, sales and admin.
costs) will help improve EBITDA
- A diversified and well-positioned business operating in volatile markets
- JL has a proven track record in not only managing change and market turmoil, but also in customer satisfaction,
innovation and building strong relations with customers, partners and other stakeholders
www.j-l.com | Oceans of know-how
Appendix
• CAPEX and financing on fully-owned newbuildings
• Charter commitments (operational lease liabilities) and contingent liabilities
• Market outlook
• Glossary
• Contact details
• Fleet list
February 2013 21
Fully-owned newbuildings (CAPEX and financing) – Status end 2012 - Remaining CAPEX of USD 104m on 4 fully-owned newbuildings
- Committed financing secured for 3 product tankers
- Bulk carrier to be delivered in 2013 held free of mortgage *)
22
Investment Committed Cash,
program financing net
USDm Outstanding
CAPEX
3 Product Tankers -72 63 -9
1 Handysize Bulk Carrier -32 *) -32
4 Deliveries in 2013 -104 63 -41
4 Total remaining deliveries -104 63 -41
Amount of committed financing based on fair market value of vessels as per end December 2012
Note: *) Expected to be used as additional security in existing facility in order to release cash which is currently pledged as security
February 2013
Charter obligations and committed charter income - Expensive (vis-a-vis current market) time charter commitments in dry bulk tailing of in 2013
- During 2013, 35% of current time-charter commitments will expire
February 2013 23
Lauritzen Bulkers
Lauritzen Kosan
Lauritzen Offshore
Lauritzen Tankers
J. Lauritzen Total
0 - 1 Year 187.2 14.5 - 28.7 230.4 1 - 5 Year 256.0 9.9 - 53.7 319.6 > 5 Year 116.1 - - - 116.1 Total 559.4 24.4 - 82.4 666.2
Number of vessels chartered in 43 9 - 7 59 Herof included chartered vessels where: JL has purchase option 9 - - - 9 JL has option to extend 6 3 - - 9
Operational lease liabilities at end 2012 – USDm
Lauritzen Bulkers
Lauritzen Kosan
Lauritzen Offshore
Lauritzen Tankers
J. Lauritzen Total
0 - 1 Year 65.3 38.2 35.2 20.0 158.7 1 - 5 Year 225.3 14.9 90.1 19.9 350.2 > 5 Year 298.4 0.1 115.8 - 414.3 Total 589.0 53.2 241.1 39.9 923.3
Number of vessels chartered out: 8 15 3 5 31
Contractual committed charter income (T/C and B/B) at end 2012 – USDm
Note: Above does not include income from committed contracts of affreightment (COAs)
Contingent liabilities - Change from 2011 to 2012 mainly caused by the formation of AXIS Offshore
- See also note 19 in the 2012 Annual Report for further details
February 2013 24
USDm 2012 2011
Guarantees undertaken for debt in joint ventures 158 17
Max. obligation to pay in capital into joint ventures 80 45
Guarantees regarding newbuildings - 15
Contingent liabilities at year end – USDm
• JL has a contingent liability relating to the Axis Offshore joint
venture of USD 47m
• JL continues to guarantee the loan facility relating to ASV “Dan
Swift” now owned by AXIS Offshore
Dry Bulk: On average 2013 expected to be below 2012 - 2013-H2 expected to see improved markets
25
The Dry Bulk Market
0
100
200
300
400
500
600
700
800
03 04 05 06 07 08 09 10 11 12
Capesize Panamax Handymax Handysize
Supply of Dry Bulk Carriers 2003-2012 (Beginning of Year)
DWTm
0
100
200
300
400
500
600
700
800
03 04 05 06 07 08 09 10 11 12
Capesize Panamax Handymax Handysize
Demand for Dry Bulk Carriers 2003-2012 DWTm
0
1000
2000
3000
4000
5000
0
6000
12000
18000
24000
30000
36000
Average of the 6 T/C Routes for the Baltic Handysize Index
Average of the 6 T/C Routes for Baltic Supramax Index
Baltic Exchange Dry Index (1st November = 1334) - RHS
Spot Market Rates 2010-2012 USD/Day
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
Handysize Handymax Panamax Capesize
25 years or more 15-24 years 0-14 years Order book
Bulk Carrier Age Profile and Order Book at Year-End
2012 (% of Existing Fleet)
February 2013
Source: J. Lauritzen A/S based on data from Clarkson Research Services
Small Gas Carrier: 2013 expected to be weaker than 2012 - Demand and supply expected to grow by 3%, however with demand lagging behind
26
Small Gas Carrier Market
February 2013
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
03 04 05 06 07 08 09 10 11 12
S/R vessels F/P vessels
Supply of Smaller Gas Carriers 2003-2012 By Type
in CBMm
0
100
200
300
400
500
600
700
East (F/P) coaster West (S/R) coaster
6500 S/R 10000 ETH
Spot Market Rates 2010-2012 USD'000/Month
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
Semi-refrigerated Fully-pressurised
Smaller Gas Carriers Age Profile And Order Book At Year End 2012 (% of existing Fleet)
25+ years 15-24 years 0-14 years Order boook
-
5
10
15
20
25
30
35
03 04 05 06 07 08 09 10 11 12
Demand for smaller gas carriers 2003-2012 by product (Mill Tons)
Ethylene Propylene Butadiene VCM LPG Ammonia
Sources: J. Lauritzen A/S based on data from Clarkson Research Services, Viamar AS and Fearnley’s
MR Product Tanker: Modest improvement expected in 2013
27
The MR Product Tanker Market
February 2013
0
20
40
60
80
100
120
140
160
03 04 05 06 07 08 09 10 11 12
10-39.900 Dwt 40-59.900 Dwt
60-79.900 Dwt 80.000+ Dwt
Supply of Product Tankers 2003-2012 DWTm
0
200
400
600
800
1000
03 04 05 06 07 08 09 10 11 12
Gasoline Kerosene
Residual fuel Gas and diesel oil
Other products
Global Refined Products Trade 2003-2012 (Mill Tons)
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
MR (40-60.000dwt) LR1 (60-80.000dwt)
25 years or more 15-24 years
0-14 years Order book
Product Tankers age Profile And Order Book
At Year-End (% Of Existing Fleet)
-5,000
0
5,000
10,000
15,000
20,000
2010-01 2010-07 2011-01 2011-07 2012-01 2012-07
BCTI TC2_37 TCE: 37,000mt CPP Rotterdam- New York
BCTI TC3_38 TCE: 38,000mt CPP Aruba (Caribs) - New York
BCTI TC4-TCE: 30,000mt, CPP/UNL Singapore- Chiba (Japan)
Spot Market Rates Key Product Tanker Routes
2010-2012
Source: J. Lauritzen A/S based on data from Clarkson Research Services
Glossary
Aframax: Crude oil tanker or product tanker too large to pass through the Panama Canal and below 120,000 dwt.
Bulk vessel: Vessels transporting large cargo quantities, e.g. coal, iron ore, steel, grain, gravel, oil, etc.
Bunker: Fuel for vessels.
Capesize: Dry bulk carrier of more than approximately 80,000 dwt; too large to pass through the Panama Canal.
Cbm: Cubic meter.
Clean products: Refers to light, refined oil products such as jet fuel, gasoline, diesel oil and naphtha.
CoA: Contract of Affreightment. Contract between shipping company and charterer concerning the freight of a predetermined volume of goods within a given period of time and/or at given intervals.
Coating: The internal coatings applied to the tanks of a product or chemical tanker. Coated tanks enable the ship to transport corrosive refined oil products or chemicals and it facilitates extensive cleaning of the tanks, which may be required in the transportation of certain cargoes.
Dirty products: Heavy oils such as crude oil or refined oil products such as fuel oil or bunker oil.
DP: Dynamic Positioning. Special equipment on board that in conjunction with bow thrusters and main propellers enable the ship to position itself in a fixed position in relation to the seabed.
Dwt: Dead Weight Tons. International unit of measurement that indicates the loading capabilities in metric tonnes of the particular vessel, including the weight of crew, passengers, stores, bunkers etc.
F(P)SO: Floating (Production) Storage Offloading Unit. Crude oil tanker used as substitute for a conventional oil platform at oil fields that are either too deep in the ground or too small to justify the use of a conventional oil platform. If the ship is an FPSO the ship has oil (or gas) processing capabilities on board.
Handy, tank: Crude oil tanker, product tanker or chemical tanker of between 10,000 and 25,000 dwt
Handymax, dry cargo: Dry bulk carrier of between approximately 40,000 and 60,000 dwt.
Handysize, dry cargo: Dry bulk carrier of between approximately 10,000 and 40,000 dwt.
IMO: International Maritime Organization A maritime organization under the UN, www.imo.org .
LPG vessels: Liquefied Petroleum Gas. Vessels used to transport ammonia and liquid gases (ethane, ethylene, propane, propylene, butane, butylenes, isobutene and isobutylene).The gases are transported under pressure and/or refrigerated.
LR1, product tanker: Long Range 1. Product tanker with the maximum dimensions for passing through the Panama Canal (width of 32.21 meters and length of 289.5 meters) of approximately 50,000—80,000 dwt.
LR2, product tanker: Long Range 2. Product tanker too large to pass through the Panama Canal of approximately 80,000 dwt.
Medium Range, tanker (MR): Product tanker of between 25,000 and 50,000 dwt.
Nautical Mile: Distance unit measure of 1,852 meters.
Offshore vessel: Vessel serving the offshore oil industry.
OPEC: Organization of Petroleum Exporting Countries.
Panamax, tanker: Crude oil tanker or product tanker with the maximum dimensions for passing through the Panama Canal (width of 32.21 metres and length of 289.5 metres) of approximately 50,000—80,000 dwt.
Panamax, dry cargo: Dry bulk vessel with the maximum dimensions for passing through the Panama Canal (width of 32.21 metres and length of 289.5 metres) of approximately 60,000—80,000 dwt.
Petrochemical gases: Industrial processed gases such as ethylene, propylene, butadiene and VCM.
Product tanker: Tanker vessel with coated tanks used to transport refined oil products.
Suezmax: Crude oil tanker with the maximum dimensions for passing through the Suez Canal (approximately 120,000—200,000 dwt.).
Time Charter (TC): Under time charters, vessels are chartered to customers for fixed periods of time at rates that are generally fixed. The charterer pays all voyage costs. The owner is responsible for payment of all vessel operating expenses (manning, maintenance, repair, docking) and capital costs of the vessel.
Time Charter Equivalent (TCE): Gross freight income less voyage-related costs (bunkers, harbor fees, etc.)
Ton-nautical mile: Unit of measurement indicating the volume of cargo and how far it has been transported.
VLCC: Very Large Crude Carrier. Crude oil tanker of between approximately 200,000 and 320,000 dwt.
VLGC: Very Large Gas Carrier. LPG ship with capacity above 60,000 cbm.
February 2013 28
Contact details
Investor relations
Jacob Winthereik Financial Investor Relationship Manager, Group Treasury
E-mail: jwi@j-l.com
Phone: +45 3396 8384
Web: http://www.j-l.com
Press & Media
Jens Søndergaard Senior Vice President, Corporate Communications
E-mail: jso@j-l.com
Phone: +45 3396 8401
Web: http://www.j-l.com
February 2013 29
JL FULLY OWNED VESSELS
Built Vessel/Type Vessel Flag Owner
subgroup
GAS
2009 Victoria Kosan ETH IOM LKS
2009 Leonora Kosan ETH IOM LKS
1996 Lizzie Kosan F/P SNG LKS
1998 Bente Kosan F/P SNG LKS
1999 Brit Kosan F/P SNG LKS
2010 Helle Kosan F/P IOM LKS
2011 Inge Kosan F/P IOM LKS
2011 Linda Kosan F/P IOM LKS
2011 Monica Kosan F/P IOM LKS
2007 Helena Kosan ETH IOM LK
2007 Isabella Kosan ETH IOM LK
2008 Henrietta Kosan ETH IOM LK
2008 Alexandra Kosan ETH IOM LK
2001 Anette Kosan F/P PAN LK
2003 Charlotte Kosan F/P PAN LK
2011 Tracey Kosan F/P IOM LK
2012 Emily Kosan F/P IOM LK
1992 Cervantes S/R MAR LK
1994 Telma Kosan S/R IOM LK
1998 Tessa Kosan S/R IOM LK
1998 Tenna Kosan S/R IOM LK
1999 Tilda Kosan S/R IOM LK
1999 Tanja Kosan S/R IOM LK
1991 Berceo S/R IOM Gasnaval
BULK
2009 Camilla Bulker Capesize PAN LB
2011 Cassiopeia Bulker Capesize MTA LB
2011 Corona Bulker Capesize MTA LB
2011 Churchill Bulker Capesize MTA LB
2011 Tess Bulker Handymax IOM LB
2011 Tanager Bulker Handymax IOM LB
2011 Toucan Bulker Handymax IOM LB
2011 Thunderbird Bulker Handymax IOM LB
2003 Lilja Bulker Handysize MTA LB
2007 Amine Bulker Handysize MTA LB
2007 Sofie Bulker Handysize MTA LB
2010 Louise Bulker Handysize PAN LB SO II
2010 Signe Bulker Handysize PAN LB
2010 Emma Bulker Handysize PAN LB SO II
2010 Emilie Bulker Handysize IOM LB
2011 Elvira Bulker Handysize IOM LB SO II
2011 Hedvig Bulker Handysize PAN LB SO II
2012 Nicoline Bulker Handysize IOM LB SO II
2012 Anne Mette Bulker Handysize IOM LB
2012 Eva Bulker Handysize IOM LB
2005 Tenna Bulker Handysize SNG JLS
2008 Maren Bulker Handysize PAN JLS
2008 Laura Bulker Handysize SNG JLS
2010 Orchard Bulker Handysize SNG JLS
2010 Sentosa Bulker Handysize SNG JLS
TANK
2004 Freja Atlantic MR DIS LT
2010 Freja Pegasus MR UK LT
2010 Freja Nordica MR PAN LT
2011 Freja Taurus MR UK LT
2011 Freja Andromeda MR UK LT
2012 Freja Crux MR DIS LT
2012 Freja Lupus MR DIS LT
OFFSHORE
1999 Dan Eagle Shuttletanker DIS LSS
2011 Dan Cisne Shuttletanker DIS LSS
2012 Dan Sabiá Shuttletanker DIS LSS
31 December 2012
JL PART-OWNED VESSELS
Built Vessel/Type Size JL
owner
share
GAS Cbm.
2008 Stella Kosan (ETH) 9,108 50.0%
2008 Stina Kosan (ETH) 9,108 50.0%
2008 Sophia Kosan (ETH) 9,108 50.0%
BULK Dwt.
2005 Durban Bulker 32,544 50.0%
2012 Milau Bulker 37,800 50.0%
1989 Id Bulker 26,970 10.0%
1994 Ideal Bulker 28,460 27.1%
1994 Mediterranean ID (Amazonia) 28,475 27.1%
1995 ID Harbour 28,460 27.1%
1995 Idas Bulker 27,321 20.0%
1995 Scan Bulker 27,308 27.1%
1996 Arctic ID 28,251 27.1%
1996 Caribbean ID (Mt Cook) 27,940 27.1%
1996 Marine Bulker 28,322 27.1%
1997 Baltic ID 28,450 27.1%
1998 Obelix Bulker 70,529 20.0%
2001 Bianco Bulker 52,193 43.5%
2004 Bianco Dan 55,628 40.0%
2004 Bianco Venture 33,773 35.0%
2008 Idship Bulker 28,050 18.0%
2009 Danship Bulker 28,000 14.0%
2009 ID North Sea 28,000 14.0%
2012 Bianco Victoria Bulker 32,500 50.0%
TANK Dwt.
2004 Freja Polaris 37,255 49.0%
OFFSHORE
2009 Dan Swift 6,000 50.0%
31 December 2012